First and foremost, the country’s median and mean household incomes continued to increase steadily, benefiting from the relatively resilient domestic economy, although the pace of growth during the period under review slowed from that in the previous survey. Second, income distribution improved as reflected by a fall in the Gini coefficient, a measure of statistical dispersion that economists use to assess income disparity between the rich and the poor.

So far, so good. But what would the scenario be like in, say, 5 to 10 years? Indeed, though our labour market fundamentals remain respectable, the number of unemployed graduates has kept rising over the years. If this trend continues, the income gap may widen. Certainly, worries about the income levels of young people will persist, especially in view of the rising cost of living.

There has been widespread debate on the possible reasons for graduate unemployment. Of these, two have often been cited: (1) low proficiency in the English language; and (2) graduates’ lack of exposure to real-world situations.

In terms of language proficiency, my discussions with industry employers revealed that foreign employers favour Malaysia over other countries because of our language advantage. We have a pool of workers who can communicate in English. Foreign employers, not just those whose mother tongue is English, feel more comfortable when dealing with employees who can at least understand English. All along the supply chain, proficiency in the language is a highly desirable skill, as attested to by the majority of employers.

It is therefore unfortunate that mastering English is still somewhat of a problem for Malaysian graduates. In fact, many of them cannot express themselves adequately at job interviews. Not only do they struggle with the language but they also lack confidence. These clearly present issues for those seeking employment in the services sector, where effective communication is a key skill.

In fact, in my experience, employers normally take no more than five minutes to judge the communication skills of interviewees before deciding whether or not to employ them. The better they speak, the more attractive they are to potential employers. In fact, specific knowledge of the work they are applying for is secondary. After all, companies normally have their own training programmes to raise their employees’ competences.

Second, real-world experience counts. It is not really graduates with straight As that employers are looking for. Unfortunately, in Malaysia, students do not seem to focus on getting real-world experience. Instead, they concentrate on scoring good grades. Not surprisingly, at secondary-school level, students try to take as many examination subjects as possible to score many As in order to secure scholarships. Even at university, not many seem interested in gaining work experience prior to their graduation.

To be fair, things have changed in recent years. For secondary-school students, involvement in extra-curricular activities counts when applying to enter a college or university. For university students, internship programmes do help in getting real-world experience. These are undoubtedly positive changes.

There are certainly no shortcuts to solving these problems. The government’s effort to upgrade the language skills of English teachers is a good start as they must be comfortable with conversing in the language with their students. Encouraging students to watch appropriate English programmes on television could help as well.

In fact, I have come across a growing number of primary-school children who can converse effortlessly in English (some with an American accent even) because they watch the Disney channel on TV. The challenge for policymakers here is thus to find ways to meaningfully expose less-privileged children to such proficiency-building TV programmes.

Another equally important factor is the general knowledge of graduates. Improving their grasp of it increases their employability tremendously as this demonstrates their initiative and interest in the world around them. In my experience, employers are turned off during interviews when graduates lack awareness of what is happening in the world.

Having some basic knowledge of politics, business, economics, technology and so on greatly enhances the employability of graduates. This is where the reading habit of students makes a difference. University subjects that involve deep discussions of global developments can also improve the general knowledge of graduates. I have seen this taking place at secondary-level international schools, and the results are very impressive. Even 15-year-old students can discuss issues related to the economies of Myanmar and North Korea.

As for gaining real-world experience, the problem is a bit more complex. Students often complain that they never get a chance to be exposed to the working world because it is not easy to get a place to do internship. Not many Malaysian companies like to take on undergraduates for two or three months. Even if they do, they usually do not have structured training programmes in place for interns. As a result, only the cream of the crop and those with good connections are selected by business organisations for internship.

To address this, a central body could be established to bridge the gap between university students and industries. This is crucial because many students rely on their universities to advise them on places for internship. Unfortunately, universities do not normally have strong connections with industry or extensive information about organisations that provide such opportunities. Thus, a centralised body would act as an effective intermediary in matching students with organisations for short-term internship programmes.

In more advanced economies, students — even those at secondary-school level — get credit for their effort to find part-time or temporary jobs during the long school breaks (for example, the summer holidays). These jobs could even be administrative positions at their schools. Gaining such experience can help students get a feel of working with others.

There are international secondary schools in the Klang Valley that encourage their students to take up such opportunities. Their teachers plan short internship programmes and even evaluate the results of these initiatives upon their conclusion. Such properly planned and executed initiatives help give students real-world experience at a young age. Of course, the personal safety of students must not be overlooked.

Nor Zahidi Alias is chief economist at Malaysian Rating Corp Bhd. The views expressed here are his own